FINAL REPORT

STUDY OF CONSUMERS BEHAVIOUR REGARDING

FINANCIAL INVESTMENTS

A Summer Internship Proposal for

Master of Business Administration

(General Management)

By

ARUN TRIPATHI

Roll Number:
FMS/MBA/2015-17/000310

Under the guidance of:

MR. VIVEK SINGHAL

Cluster Sales Manager
B2C
Angel Broking Pvt. LTD.
MUMBAI.

SRI UNIVERSITY
CUTTACK -754006
18-07-2016
 TABLE OF CONTENTS

DECLARATION......................................................................................................................................... 4
ACKNOWLEDGEMENT .......................................................................................................................... 5
CERTIFICATE OF APPROVAL ............................................................................................................. 6
EXECUTIVE SUMMARY ........................................................................................................................ 7
INTRODUCTION....................................................................................................................................... 8
Objective of the project .......................................................................................................................... 8
Plan of the study ...................................................................................................................................... 9
Need for the study ................................................................................................................................. 10
Value addition ....................................................................................................................................... 11
Limitations of the study ........................................................................................................................ 12
Research methodology .......................................................................................................................... 13
Sources of information ......................................................................................................................... 14
INDUSTRY PROFILE ............................................................................................................................. 15
Angel Broking Pvt. Ltd......................................................................................................................... 15
Milestone ................................................................................................................................................ 18
Industry over-view ................................................................................................................................ 20
VARIOUS INVESTMENTS AVENUES ................................................................................................ 23
Safe/low risk investments Avenues ...................................................................................................... 23
Moderate risk investment Avenues ..................................................................................................... 26
High risk investment Avenues ............................................................................................................. 29
Traditional investment avenues ........................................................................................................... 31
Regulator Body..................................................................................................................................... 33
DATA ANALYSIS & INTERPRETATIONS ....................................................................................... 35
Tables & Graphs ................................................................................................................................... 36
Interpretation ........................................................................................................................................ 47
Findings.................................................................................................................................................. 49
Suggestions ............................................................................................................................................ 50
Investors ............................................................................................................................................. 50
 Organisation ...................................................................................................................................... 53
CONCLUSION ......................................................................................................................................... 55
REFERENCES .......................................................................................................................................... 56

LIST OF TABLES

Table No 1: Age of the samples

Table 1.1: Gender Details
Table 1.2: Educational Background
Table 1.3: Sectors Employed.
Table1.4: Determining Investment Capacity
Table 2: Investment awareness
Table 2.1 :Investment Selection
Table 2.2: Reasons of Investment
Table 2.3: Factors Determining Instrument selection
Table no 2.3: Investment Capacity
Table 2.4: Expected Return
Table 2.5: Fixed deposits illusion
Table no 2.6: Time Horizon regarding investments
Table no 2.7: Monitoring of investments
Table no 3: Prospective Clients
Table no 3.1: Risk Taking Appetite
Table no 3.2: Botherations
Table no 3.4: Budget planning
Table 3.5: Taxability awareness
Table 3.6: Inflation Effect
Table 3.7: Sources Influencing investment decisions
 DECLARATION

I hereby declare that the project titled CONSUMER BEHAVIOUR

REGARDING FINANCIAL INVESTMENTS is an original work prepared by
me and is being submitted to SRI UNIVERSITY in partial fulfillment of MBA
(GENERAL MANAGEMENT) degree for the year 2015-17

To the best of my knowledge this report has not been

submitted earlier to the SRI SRI UNIVERSITY or any other affiliated college for
the fulfillments of MBA (GENERAL MANAGEMENT) Degree.

Arun Tripathi
MBA (2015-17)
 ACKNOWLEDGEMENT

It gives me immense pleasure to present CONSUMER BEHAVIOUR

REGARDING FINANCIAL INVESTMENTS, a project report as part of the
curriculum of Master of Business Administration. I would like to thank all the
people who gave unending support.

I express my profound thanks to Mr Laxmana Sandeep Janyavula, internal faculty

guide, Mr Vivek Singhal (Cluster Sales Manager, B 2 C) organizational guide, Miss
Manpreet Kaur Dhaliwal (Team leader) and all those who have guided and helped in
preparation of this project.

I would also like to extend my gratitude to all my friends, seniors who helped me in
conducting the survey, teaching, non-teaching staff, batch mates of Sri University,
who provided moral support and the much-needed inspiration to conclude the project
in time. I would like to especially thank my family who are integral part of the
project.

Thanking you.

Arun Tripathi
 CERTIFICATE OF APPROVAL

This is to certify that Mr Arun Vishnu Shankar Tripathi, MBA batch of 2015-17,
Faculty of Management Studies, Sri University has completed his Summer
Internship Project on topic entitled CONSUMER BEHAVIOUR REGARDING
FINANCIAL INVESTMENTS from date 15th May 2016 to 15th July 2016.
Mr Arun Vishnu Shankar Tripathi has submitted the SIP report for the partial
fulfilment of the requirements for the degree of MBA, as per the statute of the
University.
I appreciate his hard work and wish him all the best for his future career.
Thanking you.

Yours Sincerely

Mr Vivek Singhal
Cluster Sales Manager (B2C)
Angel Broking Pvt. Ltd.
Sidhpura Industrial Estate,
Goregaon (West)
 EXECUTIVE SUMMARY

Savings form an important part of the economy of any nation. With the savings invested in
various options available to the people, the money acts as the driver for growth of the country.
Indian financial scene too presents a plethora of avenues to the investors. Though certainly not
the best or deepest of markets in the world, it has reasonable options for an ordinary man to
invest his savings.

The money you earn is partly spent and the rest saved for meeting future expenses. Instead of
keeping the savings idle you may like to use savings in order to get return on it in the future.
This is called Investment.

One needs to invest to and earn return on your idle resources and generate a specified sum of
money for a specific goal in life and make a provision for an uncertain future One of the
important reasons why one needs to invest wisely is to meet the cost of Inflation. Inflation is
the rate at which the cost of living increases.

The cost of living is simply what it costs to buy the goods and services you need to live.
Inflation causes money to lose value because it will not buy the same amount of a good or
service in the future as it does now or did in the past. The sooner one starts investing the
better. By investing early you allow your investments more time to grow, whereby the concept
of compounding increases your income, by accumulating the principal and the interest or
dividend earned on it, year after year. The three golden rules for all investors are:
Invest early

Invest regularly

Invest for long term and not short term

This project will also help to understand the investors facet before investing in any of the
investment tools and thus to scrutinize the important aspects for the investors before investing
that further helped in analysing the relation between the features of the products and the
investors requirements.
 INTRODUCTION
OBJECTIVES OF THE PROJECT

The purpose of the study was to determine the CONSUMER BEHAVIOR

REGARDING FINANCIAL INVESTMENTS. Customer perception will provide a way to
accurately measure how the customers think about the products and services provided by the
company. Todays tiring economic conditions have forced difficult decisions for companies.
Most are making conservative decisions that reflect a survival mode in the business
operations. During these difficult times, understanding what customers on an ongoing basis
is critical for survival. Executives need a 3rd party understanding on where customer loyalties
stand. More than ever management needs ongoing feedback from the customers, partners and
employees in order to continue to innovate and grow. The main objective of the project is to
find out the needs of current and future customers. For this report, customer perception and
awareness level will be measured in many important areas like:
To understand about different investment avenues available in India.
To find sources of information to investors about the various financial instrument
To find out how the investor wants to invest i.e. on his own or through a broker.
To find out the saving habits of the different customers and the amount they invest
in various financial instruments.
Type of financial instrument they like to invest.
Duration preferred to keep the money invested.
Expected return from the investment.
Considerable factors before investing.
To find out the risk profile of the investor.
To give a recommendation to the investors that where they should invest.

To evaluate the consumer attitude towards saving and decision making regarding
investments.

To Know the risk tolerance level of individual investors and suggest a suitable
portfolio

To develop a profile of sample Indian investors in terms of their demographic bases on

occupation of the sample investor

To Identify the objective of savings of an investor

 PLAN OF THE STUDY

Chapter 1 covers the core areas of the report: The introduction, objectives, need,

limitations and research methodology of the study.it also covers value addition and

sources of information

Chapter 2 covers the industry profile with detailed explanation about the company

peers, financial industry, governing bodies and various investment avenues.

Chapter 3 covers data analysis and interpretation part analysis is made from the data

obtained through questionnaire

Chapter 4 covers findings and suggestions drawn from data analysis and interpretation

Chapter 5 covers the summary and conclusion report.

 NEED FOR THE STUDY

Stock Market has been subject to speculations and inefficiencies, which are beached to the

Rationality of the investor. Traditional investments perception was based on two

assumptions. Firstly, Investors make rational decisions and secondly investor are unbiased in

their predictions about future returns on the stocks. However financial economist have now

realised that the long held assumptions of traditional finance are wrong and found that the

investor can be irrational and make predictable errors about the return on investment on their

investments.

This analysis on Consumer behaviour regarding financial decisions is an attempt to know the

profile of the investor and also know the characteristic of the investors so as to know their

preferences with respect to their investments, The Study also tries to unravel the influence of

demographic factors like age on risk tolerance level of the investors.

 VALUE ADDITION

This Analysis will help to strengthen the investor intimacy. This analysis will also drag

attention on various investments avenues available in India that will help in many ways like

the expectations of different types of investors regarding particular service requirements can

be identified.

The Common problems faced by the investors can be understood

It also enhances new service initiative

This study will help in gaining a better understanding of what an investor looks for in

an investment option

It can be used by the financial sector in designing better financial instruments

customised to suit the needs of the investors.

It will also help the agents and brokers in marketing the existing financial instruments.

It will prove knowledge to the investors about the various financial services provided

by the company to their investors

It will also help the company to understand what is the requirement and expectations

of different categories of investors

This analysis will be originated in order to empower the investors with detailed research on

various investments avenues available in India. The awareness level of the investors about

the various investments options and about what is the perception of the investors with regard

to the investments they want to make.

 LIMITATIONS OF THE STUDY

This analysis is based upon investors behaviour win normal conditions which might get
changed or differ in various other situations. This analysis would be focusing on the
information from the investors about their knowledge, perception and behaviour on different
financial products.

The various limitations to the study are as follow:

The total number of financial instruments in the market is so large that it needs a lot of
resources to analyse them all. There are various companies providing these financial
instruments to the public. Handling and analysing such a varied and diversified data
needs a lot of time and resources.

As the analysis is based on primary as well as secondary data, possibility of

unauthorized information cannot be avoided.

Reluctance of the people to provide complete information about them can affect the
validity of the responses.

The lack of knowledge of customers about the financial instruments can be a major
limitation.

The information can be biased due to use of questionnaire.

Human Reponses are bound to change from time to time and might shift their opinions
on different aspect on different conditions.
 RESEARCH METHODOLOGY

Sampling Technique:

Initially, a rough draft will be prepared keeping in mind the objective of the research. A pilot
study will be undertaken in order to know the accuracy of the questionnaire. The Final
Questionnaire will be arrived at only after certain changes are incorporated. Convince
sampling technique will be used for collecting the data form different investors. The
investors were selected by the convince sampling method .The Selection of Units from the
population based on their easy availability and accessibility to the researchers is known as
convince sampling. Convince sampling is at its best in survey dealing with an exploratory
purpose for generating ideas.

Sampling Units:

The respondents who will be asked to fill out the questionnaire are the sampling units. These
comprises of employees of MNCs, Government employees. Students, Self Employed,
professionals and other probable investors.

Sampling Size:

The Sample Size will be restricted to only 110, which comprised mainly people from
different parts India.

Sampling Area:

The area of research mainly constitutes sample from Mumbai and with Help of Internet and
Telephonic interviews samples were also collected from Metro Cities like Bengaluru,
Hyderabad, Vadodara and Bhubaneswar.
 SOURCES OF INFORMATION

Primary Data:
Information is collected by conducting survey by distributing a questionnaire to 110
investors in Mumbai, Bengaluru, Hyderabad, Vadodara and Bhubaneswar. The samples
collected from outside Mumbai were possible because of help from various online mailing
and survey tools. These 110 investors are of different age group, different occupation,
different income levels and different qualifications.
(A copy of the questionnaire is given at the end of this project report)

Secondary Data:
The data was collected by using following means.
Articles in financial Newspapers
Investment magazines, Business magazines, Financial Chronicles.
Experts Opinion published in various print media
Books written by various Foreign and Indian authors on investments
Data available on the internet through various websites.
www.moneycontrol.com
www.angelbroking.com
www.icicidirect.com
www.indiamoney.com
www.economictimes.com
www.moneymanagement.com
 INDUSTRY PROFILE

Angel Broking Pvt. Ltd.

Company overview:
Angel Broking is an Indian Stock Broking firm established in 1987. The company is a
member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), National
Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity Exchange of
India Limited (MCX). It is a depository participant with Central Depository Services Limited
(CDSL). The company has 8500+ sub-brokers and franchisee outlets in more than 850 cities
across India.
Angel Broking offers products such as:
Angel Broking App (New Mobile App): It offers Live streaming tracking of market
news updates, price watch list, trade reports (including limit & holdings, P&L
statement), charts & seamless fund & securities transfer.
Angel Eye (Browser based trading platform): It enables to manage portfolio and trade
efficiently, obtain real time market movement analysis, comprehensive reports,
maintain notes & transactions, calculators etc.
Angel Speed Pro (Application trading platform): It caters with historical records &
reference, real time tracking & updates, detailed portfolio at a glance, facility to invest
& redeem mutual funds anytime.
Entrepreneur Dinesh Thakkar started his business in 1987 with a capital of Five Lakhs
Indian Rupees and lost half of the money within eight months. In 1989, he started off again
as a sub-broker. Later, Angel Broking was incorporated as a wealth management, retail and
corporate broking firm in December, 1997. In November 1998, Angel Capital and Debt
Market Ltd. gained membership of National Stock Exchange as a legal entity.[19] The
company opened its commodity broking Division in April, 2004. In November 2007, Birla
Sun Life Insurance joined hands with Angel Broking for distribution of its insurance
products. In 2007. The World Bank arm International Finance Corporation bought 18% stake
in Angel Broking.

SERVICES RENDERED
Equity Trading: Equity trading is the buying and selling of company stock shares. Shares in
large publicly traded companies are bought and sold through one of the major stock
exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange
(NSE) which serve as managed auctions for stock trades.
Commodities: A commodity market is a market that trades in primary economic sector rather
than manufactured products. Soft commodities are agricultural products such as wheat,
coffee, cocoa and sugar. Hard commodities are mined, such as gold and oil.

Portfolio Management Services: Angel Broking offers professional Portfolio Management

Services (PMS) to HNIs who seek customized solutions to realize their investment goals.
PMS is a customised offering, providing a range of investment options best suited for you in
the current market scenario. Our Portfolio Managers are equipped to create an investment
portfolio across various investment avenues like Equities, Fixed Deposits, and Bonds etc. to
meet your unique needs.
Mutual funds: A mutual fund is a professionally managed investment fund that pools money
from many investors to purchase securities. While there is no legal definition of the term
"mutual fund", it is most commonly applied to so-called open-end investment companies,
which are collective investment vehicles that are regulated and sold to the general public on
a daily basis
Life insurance: Life insurance, is a contract between an insurance policy holder and an
insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of
money in exchange for a premium, upon the death of an insured person.

IPO: An initial public offering, or IPO, is the first sale of stock by a company to the public.
A company can raise money by issuing either debt or equity. If the company has never
issued equity to the public, it's known as an IPO.

Investment Advisory: An investment advisor is defined by the Investment Advisors Act of

1940, as any person or group that makes investment recommendations or conducts securities
analysis in return for a fee, whether through direct management of client assets or via written
publications.
An investment advisor who has sufficient assets to be registered with the SEC is known as a
Registered Investment Advisor, or RIA. Investment advisors are prohibited from
disseminating advice known to be deceitful or fraudulent, and from acting as a principal on
their own accounts by buying and selling securities between themselves and a client without
prior written consent. May also be referred to as a "financial advisor".
 SERVICE CHARGES

Brokerage Fees & Depository Charges:

 MILESTONES TIME-LINE

DECEMBER, 1997
Angel Broking Ltd. incorporated as a wealth management, retail and corporate broking firm
NOVEMBER, 1998
Angel Capital and Debt Market Ltd. incorporated as a member of NSE
MARCH, 2002
Angel Broking develops web-enabled back office software to maximize its operational efficiency
NOVEMBER, 2002
Angel Broking successfully conducts its first Investor Seminar to increase investor awareness
APRIL, 2003
Angel Broking publishes its first research report
APRIL, 2004
Angel Broking expands its basket of services by establishing the Commodity Broking division
SEPTEMBER, 2004
Angel Broking launches Online Trading Platform facilitating easy and hassle-free trading for its
customers
OCTOBER, 2005
Angel Broking wins the prestigious Major Volume Driver Award by BSE for 2004-2005
MARCH, 2006
Angel Broking on expansion drive crosses 1,00,000 mark in unique trading accounts
JULY, 2006
Angel Broking launches Portfolio Management Services (PMS)
SEPTEMBER, 2006
Angel Broking commences distribution of Mutual Funds and IPOs
OCTOBER, 2006
Angel Broking bags the coveted Major Volume Driver Award by BSE for 2005-2006
DECEMBER, 2006
Angel Broking expands its network by creating 2500 business associates
MARCH, 2007
Angel Broking crosses the benchmark of 2,00,000 unique trading accounts

NOVEMBER, 2007
Angel Broking wins the honoured Major Volume Driver Award by BSE for 2006-2007
 NOVEMBER, 2007
Angel Broking augments its business with introduction of Insurance Distribution in alliance with
Birla Sun Life.
NOVEMBER, 2008
Angel Broking wins the esteemed Major Volume Driver Award by BSE for 2007-2008
AUGUST, 2008
Angel Broking crosses 5,00,000 mark in unique trading accounts
MAY, 2009
Angel Broking wins two prestigious awards for 'Broking House with Largest Distribution Network'
and 'Best Retail Broking House' at Dun & Bradstreet Equity Broking Awards
OCTOBER, 2009
Angel Broking bags the coveted Major Volume Driver Award by BSE for 2008-09
NOVEMBER, 2010
Angel Broking bags the coveted Major Volume Driver Award by BSE for 2009-10
MARCH, 2011
Awarded the 'Best in Contribution Investor Education & Category Enhancement of the year' and
'Best Commodity Research of the year'
OCTOBER, 2011
Angel Broking bagged the Dun & Bradstreet Equity Broking Awards 2011 for 'Best Retail Broking
House' and 'Fastest Growing Equity Broking House' (Large Firms) at Dun & Bradstreet Equity
Broking Awards 2011
OCTOBER, 2013
Angel Broking was awarded the BSE-IPF D&B Equity Broking Award for 'Best Retail Equity
Broking House' 2013
OCTOBER, 2013
Angel Broking was awarded the 'Broking House with the Largest Distribution Network', 2013
OCTOBER, 2013
Angel Broking is awarded the 'Top performer in equity segment' of the year - BSE.
OCTOBER, 2014
Angel Broking was awarded the 'Broking House with the Largest Distribution Network', 2014
OCTOBER, 2014
Angel Broking was awarded the Top Three Client Traded Members in Equity - BSE
OCTOBER, 2014
Angel Broking was awarded the Top Ten Performing Members in New Client Enrolments - NSE
 OCTOBER, 2015
Angel Broking was awarded the 'Top Performer in Equity Segment' of the year - BSE.
OCTOBER, 2015
Angel Broking was awarded the D&B Equity Broking Award for 'Best Equity Broking House' 2015
MARCH, 2016
Angel Broking was awarded the Top Performing Member in Currency Futures NSE

INDUSTRY OVERVIEW/COMPETETIORS

1. SHAREKHAN
As its tagline says, it actually is the guide to your financial jungle. Founded way back in the year 1982,
Share khan has rapidly outgrown over these years by capturing huge mass network amounting to 1 million
thus, its apparent that clients trust this brand. It serves with repository of information with knowledge hubs
regular reports, newsletters, share mobile app, active training cell and seminars. With its tech savvy and
robust software and platforms it facilitates flawless trading. It comes with a remarkable facilities like:

Am Broker Bridge which is trade charting software?

Advanced option chain with strategies in option quotes.
6 trend indicators where user can spot entry-exit point with new trend indicators.
Live chat where queries answered right away from trade tiger priority service desk.

2. ICICI DIRECT

The company was incorporated in the millennium year 2000 from ICICI securities which is one of Indias
top notch financial service provider the ICICI group. It provides seamless trading, security and control
with its 3-in-1 online trading platform, allowing to integrate, ICICI direct Brokerage Account, Bank account
and one or more Demat accounts. The portfolio tracker helps in better review and monitor trading
transactions with ease making it a good full-service broker in wealth management.

With its breakthrough advancements like on-the-move, call-n-trade, equity advisory services, ATS,
ICICIdirect institute, mobile trading ICICIdirect app for tracking and review it adds immense ease for the
next big profit move.ICICI direct also provides forum named iCommunity for better sharing and seeking
of market knowledge. Its services available for resident Indians as well as non-residents Indians.
3. ZERODHA

It was kick-started by a Nithin Kamath, a trader himself way back in 2010. As the name goes it is puts zero
to all barriers, is a newbie in the industry booming rapidly in the industry.Zerodha, being a discount
broker offers a low and transparent brokerage charge with an advanced trading platform & technology. It
hails with a wide variety of reporting & analytics tools and interactive client support. Not even it rules the
roost as a broker but also complies with CSR norms. The company, flaunts key products like KITE (mobile
trading platform), Q (reporting tool), QUANT (analysis and visualization tool) and PI (desktop trading
platform) with an average turnover of nearing to INR 39 lakhs in just roughly 6 years of span.

4. IIFL HOLDINGS LTD.

Formerly known as India Info line Limited (IIFL) is a publicly traded company listed at BSE and NSE. It
had commenced in 1995 as leading firm in offering a gamut of financial services in optimizing many asset
classes with sheer dynamism. The company has achieved a consolidated net worth of Rs.25,577 million as
of the financial year ended March 31, 2015.IIFL provides trader terminal an easy to use interface and
analytical tools for capturing ones sums from the markets. It gives exclusive coverage of markets and
companies with expert market recommendations. This brokerage firm is catering over 2.9 million customers
over the years having global footprints too. It has widely constructed a network of close to 2,500 business
locations spread across 850+ towns and cities.

5. MOTILAL OSWAL

As a matter of fact when trading is concerned it enables customer-centric systems for operational efficiency.
It has served the country and abroad for over 29 years with its comprehensive and solid research, advice,
cutting-edge technology and brand value.Motilal Oswal has dedicated research end providing quiet accurate
recommendations and reports. It is serving over 7.5 lakhs happy customers till date. The company has
evolved with an out of the box concept of Indias first smart watch app which got great responses from its
clients.

6. HDFC SECURITIES

It boasts as one of the supreme stock broking companies in India and a subsidiary of HDFC Bank, a
renowned private sector bank. It is proficient and insightful in providing a 360-degree view on customized
financial planning and wealth creation. The company has various product to suit each of clients varied
investment need, thats one of the reason it had made up to the list of top 10 broking companies in India. It
enables hassle-free trading via online, mobile app, telephone or any of its branches; while backing with
extensive & unbiased research diligently. One can also enrol for SMS Insta alerts, as well as make a watch
list of stocks for timely tracking. Exclusive paid software named BLINK whose minimum half-yearly plan
from Rs. 2999 is high-speed trading terminal offering key features like:

Fast Buy/Sell Order entry.

Monitoring real time price movement.
Customized Trading platform to assist investment decision.
Closely monitoring transaction Order Book.
Trade Book, Net Position.
Short keys for functions like Buy, Sell, Order Book, etc.
Single Screen to place an order in Equity and F&O.
Thus, plenty of services can be availed from this broker, may it be for a full time trader or long term
investor.

7. KOTAK SECURITIES

Started in the year 1994 is a subsidiary of Kotak Mahindra Bank Ltd. Its USP is stability and
innovation. It flaunts a noteworthy client support and significant presence with its unconventional
centralized risk management system. Not only has it catered retail but institutional investors as well. It
flaunts over 10.58 Lakh customer accounts with 1128 branches all across 352 cities in India. Kotak
Securities has bagged plenty of awards in the industry as a pioneer in innovation and assisted trading, recent
was for Broker of the Year (India) The Asian Bankers Financial Markets Business Achievement Awards
2014.

8. KARVY

Being one of the oldest firm in the country based at Hyderabad dated back to the year 1982, Karvy caters
individual investors in various capacities, provides investor services to big shot corporate houses. It provided
financial as well non-financial services too. The company is dispersed over 600 branches in India. It offers
leading edge advice involving incisive ideas like growth hub, daily fundamental and technical reports, a
monthly magazine named Finapolis, for gauging markets better and efficiently apart from its fair
brokerage plans.
9. GEOJIT BNP PARIBAS

The company has its head office situated in Kochi, is a Kerala based company having a presence over 19
States and 2 Union Territories exceeding over 500 branches, well-crafted with attractive brokerage tariffs. It
not only has a profound offline presence but also provides automated online trading services.Geojit provides
an extensive range of fund options. The company has enjoyed a first mover advantage in online trading. It
gives a fair expertise, transparency and cutting edge technology solutions.

Beside these big players in the market there are many small and medium scale broking houses which are
performing their business on a very niche level, and catering the need or filling the space left over by this
big broking houses.

VARIOUS INVESTMENTS AVENUES

Safe/low risk investments Avenues:

Savings Accounts: A savings account is a deposit account held at a bank or other financial institution
that provides principal security and a modest interest rate. Depending on the specific type of savings
account, the account holder may not be able to write checks from the account (without incurring
extra fees or expenses) and the account is likely to have a limited number of free
transfers/transactions.
Savings account funds are considered one of the most liquid investments outside of demand
accounts and cash. In contrast to savings accounts, checking accounts allow you to write
checks and use electronic debit to access your funds inside the account. Savings accounts are
generally for money that you don't intend to use for daily expenses. To open a savings
account, simply go down to your local bank with proper identification and ask to open an
account. These deposits accounts are one of the most popular deposits for individual
accounts.
These accounts not only provide cheque facility but also have lot of flexibility for deposits
and withdrawal of funds from the account. Most of the banks have rules for the maximum
number of withdrawals in a period and the maximum amount of withdrawal, but hardly any
bank enforces these.
However, banks have every right to enforce such restrictions if it is felt that the account is
being misused as a current account. Till 24/10/2011, the interest on Saving Bank Accounts
was regulated by RBI and it was fixed at 4.00% on daily balance basis.
However, wef 25th October, 2011, RBI has deregulated Saving Fund account interest rates
and now banks are free to decide the same within certain conditions imposed by RBI.
Under directions of RBI, now banks are also required to open no frill accounts (this term is
used for accounts which do not have any minimum balance requirements).
Although Public Sector Banks still pay only 4% rate of interest, some private banks like
Kotak Bank and Yes Bank pay between 6% and 7% on such deposits. From the FY 2012-
 13, interest earned up to Rs 10,000 in a financial year on Saving Bank accounts is exempted
from tax.

Bank fixed Deposits: A term deposit is a deposit held at a financial institution that has a fixed term.
These are generally short-term with maturities ranging anywhere from a month to a few years. When
a term deposit is purchased, the lender (the customer) understands that the money can only be
withdrawn after the term has ended or by giving a predetermined number of days notice. These
types of financial products are sold by banks, thrift institutions and credit unions.

All Banks in India (including SBI, PNB, BoB, BoI, Canara Bank, ICICI Bank, Yes Bank etc.)
Offer fixed deposits schemes with a wide range of tenures for periods from 7 days to 10
years. These are also popularly known as FD accounts. However, in some other countries
these are known as "Term Deposits" or even called "Bond".
The term "fixed" in Fixed Deposits (FD) denotes the period of maturity or tenor. Therefore,
the depositors are supposed to continue such Fixed Deposits for the length of time for which
the depositor decides to keep the money with the bank.
However, in case of need, the depositor can ask for closing (or breaking) the fixed deposit
prematurely by paying a penalty (usually of 1%, but some banks either charge less or no
penalty). (Some banks introduced variable interest fixed deposits.

The rate of interest on such deposits keeps on varying with the prevalent market rates i.e. it
will go up if market interest rates goes and it will come down if the market rates fall.
However, such type of fixed deposits have not been popular till date).

The rate of interest for Fixed Deposits differs from bank to bank (unlike earlier when the
same were regulated by RBI and all banks used to have the same interest rate structure. The
present trends indicate that private sector and foreign banks offer higher rate of interest.

The earlier trend that private sector and foreign banks offer higher rate of interest is no more
valid these days. However, now a days small banks are forced to offer higher rate of interest
to attract more deposits. Usually a bank FD is paid in lump sum on the date of maturity.

However, most of the banks have also facility to pay/ credit interest in saving account at the
end of every quarter. If one desires to get interest paid every month, then the interest paid
will be at a marginal discount rate. In the changed computerized environment, now the
Interest payable on Fixed Deposit can also be easily transferred on due dates to Savings Bank
or Current Account of the customer.

Public Provident fund: A compulsory, government-managed retirement savings scheme used in

India, Hong Kong, Singapore, Malaysia, Mexico and other countries that is similar to the United
States Social Security program. It is run by a government for the benefit of its citizens. A provident
fund is a form of social safety net into which workers must contribute a portion of their salaries and
 employers must contribute on behalf of their workers. The money in the fund is then paid out to
retirees, or in some cases to the disabled who cannot work.

From 1.4.2016, interest rates are as follows: - 8.10% per annum (compounded yearly).
Minimum INR. 500/- Maximum INR. 1, 50,000/- in a financial year.
Deposits can be made in lump-sum or in 12 instalments.
An individual can open account with INR 100/- but has to deposit minimum of INR 500/- in a
financial year and maximum INR 1,50,000/-
Joint account cannot be opened.
Account can be opened by cash/cheque and In case of cheque, the date of realization of
cheque in Govt. account shall be date of opening of account.
Nomination facility is available at the time of opening and also after opening of account.
Account can be transferred from one post office to another.
The subscriber can open another account in the name of minors but subject to maximum
investment limit by adding balance in all accounts.
Maturity period is 15 years but the same can be extended within one year of maturity for
further 5 years and so on.
Maturity value can be retained without extension and without further deposits also.
Premature closure is not allowed before 15 years.
Deposits qualify for deduction from income under Sec. 80C of IT Act.
Interest is completely tax-free.
Withdrawal is permissible every year from 7th financial year from the year of opening
account.
Loan facility available from 3rd financial year.

National Savings Certificates: National Savings Certificates, popularly known as NSC, is an Indian
Government Savings Bond, primarily used for small savings and income tax saving investments in
India. It is part of the postal savings system of Indian Postal Service (India Post).
These can be purchased from any Post Office in India by an adult (either in his/her own name or on
behalf of a minor), a minor, a trust, and two adults jointly. These are issued for five and ten year
maturity and can be pledged to banks as collateral for availing loans. The holder gets the tax benefit
under Section 80C of Income Tax Act, 1961.
Scheme specially designed for Government employees, Businessmen and other salaried
classes who are Income Tax assesses.
No maximum limit for investment.
No Tax deduction at source.
Certificates can be kept as collateral security to get loan from banks.
Investment up to INR 1, 00,000/- per annum qualifies for IT Rebate under section 80C of
Income Tax Act.
Trust and HUF cannot invest.
Rate of interest 8.10%.
Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR.
147.61 After 5 years.
Buy National Savings Certificates (NSCs) every month for Five years Re-invest on maturity
and relax - On retirement it will fetch you monthly pension as the NSC matures.
 A single holder type certificate can be purchased by, an adult for himself or on behalf of a
minor or by a minor.
Deposits qualify for tax rebate under Sec. 80C of IT Act.
The interest accruing annually but deemed to be reinvested under Section 80C of IT Act.

Government Securities: A government security is a bond issued by a government authority with a

promise of repayment upon maturity. Government securities such as savings bonds, treasury bills
and notes also promise periodic coupon or interest payments. These securities are considered low-
risk, since they are backed by the taxing power of the government.

Moderate risk investment Avenues:

Mutual Funds: A mutual fund is a pool of money from numerous investors who wish to save or
make money just like you. Investing in a mutual fund can be a lot easier than buying and selling
individual stocks and bonds on your own. Investors can sell their shares when they want.
Professional Management. Each fund's investments are chosen and monitored by qualified
professionals who use this money to create a portfolio. That portfolio could consist of stocks, bonds,
money market instruments or a combination of those.
Fund Ownership. As an investor, you own shares of the mutual fund, not the individual securities.
Mutual funds permit you to invest small amounts of money, however much you would like, but even
so, you can benefit from being involved in a large pool of cash invested by other people. All
shareholders share in the funds gains and losses on an equal basis, proportionately to the amount
they've invested.
With plethora of mutual funds in the market, for most of the investors its a daunting task where to
invest their money. A combination of 4-5 mutual funds in the portfolio is good enough to create a
diversified portfolio. The question is how to select those 4-5 mutual funds? Mutual funds invest in
different asset classes including equity, debt and gold. Higher return seeking investors, who do not
mind taking some risk, look at equity as an investment destination. Shorter-term investors, who may
want to keep money liquid, need some sort of regular income or keep capital protected; look at
mutual funds that invest in debt products.

Equity linked mutual funds: These funds invest in shares of companies that are listed on the
stock exchanges. Depending upon the sub-category of equity class, we may define them as:
Large-cap funds: Large-cap funds are, typically, the least risky funds. These companies are
among the least volatile companies as they are mostly in mature businesses. You must allocate
highest to this category of investment.
Mid- and small-cap funds: These funds are riskier than large-cap funds. They invest in small-
sized companies that are in their growing stages. Since these companies are in their growing
stages, they can get volatile in an uncertain market. These are high-risk companies; they typically
rise more than large-cap funds in rising markets, but fall more than large-cap companies in falling
markets.

Sector/thematic funds: While sector funds invest in one or two sectors, thematic funds invest in
a bunch of sectors that are woven by a common theme, such as infrastructure, consumer
 spending, fast-moving consumer goods and so on. These are the riskiest of all types of funds as
their portfolios are typically very concentrated.

Debt funds: Debt funds invest in fixed-income yielding instruments. There are many types of
debt funds, but broadly they fall into three broad types. Bond funds invest in corporate bonds and
partly in government securities. These funds are long-term and short-term in nature. Typically,
long-term bond funds carry an average maturity of around three to about five or maybe even 10
years. The longer a debt funds average maturity, the riskier it gets because scripts with long
maturities take a long time to get wound up and therefore get exposed to market vagaries and
volatilities for a long time. Depending upon the interest rate environment you must allocate to
these funds. If the interest rates are expected to fall, you may allocate more on funds with longer
maturity.
G-Secs: The second type of debt funds is government securities (G-sec) funds. Like bond funds,
these too come in long-term and short-term variety. These are mostly seasonal funds as they
invest only in government securities; scripts issued by the Reserve Bank of India. Though
government securities are the safest debt instruments because they are issued by the government
of India and hence come guaranteed, they are also the most volatile because they are the most
liquid debt instruments in the debt market. Allocate to these funds when you expect interest rates
to fall.
Liquid and ultra-short-term funds are meant to park your surplus cash instead of lying in a
savings deposit. While liquid funds are meant to park your cash for up to a month, use ultra-
short-term funds if you wish to invest your cash for up to three-six months. These are considered
to be the least risky because they invest in scripts that mature in a very short time. Gold funds
invest in gold bars or gold-backed securities. Gold funds are of two typesthose that mimic gold
prices in the form of an index fund and those that buy shares of gold mining companies. You
must invest not more than 10% of your portfolio in a gold fund. Hybrid funds invest across
equity and debt asset classes. They are either balanced funds (invest around 65% in equities and
rest in debt) or monthly income plans/regular income plans (invests up to 25% in equities and the
rest in debt).

Debentures: A debenture is a type of debt instrument that is not secured by physical assets or
collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer.
Both corporations and governments frequently issue this type of bond to secure capital. Like other
types of bonds, debentures are documented in an indenture.
There are two types of debentures:
Convertible debentures, which are convertible bonds or bonds that can be converted into
equity shares of the issuing company after a predetermined period of time. "Convertibility" is
a feature that corporations may add to the bonds they issue to make them more attractive to
buyers. In other words, it is a special feature that a corporate bond may carry. As a result of
the advantage a buyer gets from the ability to convert, convertible bonds typically have lower
interest rates than non-convertible corporate bonds.
Non-convertible debentures, which are simply regular debentures, cannot be converted into
equity shares of the liable company. They are debentures without the convertibility feature
 attached to them. As a result, they usually carry higher interest rates than their convertible
counterparts.

Bonds: A bond is a debt investment in which an investor loans money to an entity (typically
corporate or governmental) which borrows the funds for a defined period of time at a variable or
fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to
raise money and finance a variety of projects and activities. Owners of bonds are debt holders, or
creditors, of the issuer.

Life Insurance: A life insurance policy is a contract with an insurance company. In exchange for
premium payments, the insurance company provides a lump-sum payment, known as a death benefit,
to beneficiaries upon the insured's death. Typically, life insurance is chosen based on the needs and
goals of the owner. Term life insurance generally provides protection for a set period of time, while
permanent insurance, such as whole and universal life, provides lifetime coverage. It's important to
note that death benefits from all types of life insurance are generally income tax-free.

The basic types of life insurance policies are:

Term insurance: Term plans are the most basic form of life insurance. They provide life
cover with no savings / profits component. They are the most affordable form of life
insurance as premiums are cheaper compared to other life insurance plans. Online term
insurance plans provide pure risk cover, which explains the lower premiums. A fixed sum of
money - the sum assured is paid to the beneficiaries if the policyholder expires over the
policy term. If the policyholder survives, there is no pay out.

Endowment plans: Endowment plans differ from term plans in one critical aspect i.e.
maturity benefit. Unlike term plans which pay out the sum assured, along with profits, only in
case of an eventuality over the policy term, endowment plans pay out the sum assured under
both scenarios death and survival. However, endowment plans charge higher fees /
expenses reflected in premiums for paying out sum assured, along with profits, in either
scenario death or maturity. The profits are an outcome of premiums being invested in asset
markets equities and debt.

Unit linked insurance plans (ULIP): ULIPs are a variant of the traditional endowment plan.
They pay out the sum assured (or the investment portfolio if its higher) on
death/maturity.ULIPs differ from traditional endowment plans in certain areas. As the name
suggests, performance of ULIP is linked to markets. Individuals can choose the allocation for
investments in stock/debt markets. The value of the investment portfolio is captured by the
NAV (net asset value). To that end, there are many similarities between ULIPs and mutual
funds. ULIPs differ in one area, they are a combination of investment and insurance, while
mutual funds are a pure investment avenue

Whole life policy: A whole life insurance policy covers a policyholder over his life. The main
feature of a whole life policy is that the validity of the policy is not defined so the individual
 enjoys the life cover throughout his life. The policyholder pays regular premiums until his
death, upon which the corpus is paid out to the family. The policy expires only in case of an
eventuality as there is no pre-defined policy tenure.

Money back policy: A money back policy is a variant of the endowment plan. It gives
periodic payments over the policy term. To that end, a portion of the sum assured is paid out
at regular intervals. If the policy holder survives the term, he gets the balance sum assured. In
case of death over the policy term, the beneficiary gets the full sum assured.

High risk investment Avenues:

Equity Markets: The market in which shares are issued and traded, either through exchanges or
over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a
market economy because it gives companies access to capital and investors a slice of ownership in a
company with the potential to realize gains based on its future performance.
The Indian Equity Market is more popularly known as the Indian Stock Market. The Indian equity
market has become the third biggest after China and Hong Kong in the Asian region. According to
the latest report by ADB, it has a market capitalization of nearly $600 billion. As of March 2009, the
market capitalization was around $598.3 billion (Rs 30.13 lakh crore) which is one-tenth of the
combined valuation of the Asia region. The market was slow since early 2007 and continued till the
first quarter of 2009. A stock exchange has been defined by the Securities Contract (Regulation) Act,
1956 as an organization, association or body of individuals established for regulating, and controlling
of securities.
The Indian equity market depends on three factors -
Funding into equity from all over the world
Corporate houses performance
Monsoons
The stock market in India does business with two types of fund namely private equity fund and
venture capital fund. It also deals in transactions which are based on the two major indices - Bombay
Stock Exchange (BSE) and National Stock Exchange of India Ltd. (NSE). The market also includes
the debt market which is controlled by wholesale dealers, primary dealers and banks. The equity
indexes are allied to countries beyond the border as common calamities affect markets. E.g. Indian
and Bangladesh stock markets are affected by monsoons. The equity market is also affected through
trade integration policy. The country has advanced both in foreign institutional investment (FII) and
trade integration since 1995. This is a very attractive field for making profit for medium and long
term investors, short-term swing and position traders and very intraday traders.
The Indian market has 22 stock exchanges. The larger companies are enlisted with BSE and NSE.
The smaller and medium companies are listed with OTCEI (Over The counter Exchange of India).
The functions of the Equity Market in India are supervised by SEBI (Securities Exchange Board of
India). History of Indian Equity Market The history of the Indian equity market goes back to the 18th
century when securities of the East India Company were traded. Till the end of the 19th century, the
trading of securities was unorganized and the main trading centres were Calcutta (now Kolkata) and
Bombay (now Mumbai). Trade activities prospered with an increase in share price in India with
Bombay becoming the main source of cotton supply during the American Civil War (1860-61). In
 1865, there was drop in share prices. The stockbroker association established the Native Shares and
Stock Brokers Association in 1875 to organize their activities. In 1927, the BSE recognized this
association, under the Bombay Securities Contracts Control Act, 1925. The Indian Equity Market
was not well organized or developed before independence. After independence, new issues were
supervised. The timing, floatation costs, pricing, interest rates were strictly controlled by the
Controller of Capital Issue (CII). For four and half decades, companies were demoralized and not
motivated from going public due to the rigid rules of the Government. In the 1950s, there was
uncontrollable speculation and the market was known as 'Satta Bazaar'. Speculators aimed at
companies like Tata Steel, Kohinoor Mills, Century Textiles, Bombay Dyeing and National Rayon.
The Securities Contracts (Regulation) Act, 1956 was enacted by the Government of India. Financial
institutions and state financial corporation were developed through an established network. In the
60s, the market was bearish due to massive wars and drought. Forward trading transactions and
'Contracts for Clearing' or 'badla' were banned by the Government. With financial institutions such as
LIC, GIC, some revival in the markets could be seen. Then in 1964, UTI, the first mutual fund of
India was formed. In the 70's, the trading of 'badla' resumed in a different form of 'hand delivery
contract'. But the Government of India passed the Dividend Restriction Ordinance on 6th July, 1974.
According to the ordinance, the dividend was fixed to 12% of Face Value or 1/3 rd. of the profit
under Section 369 of The Companies Act, 1956 whichever is lower. This resulted in a drop by 20%
in market capitalization at BSE (Bombay Stock Exchange) overnight. The stock market was closed
for nearly a fortnight. Numerous multinational companies were pulled out of India as they had to
dissolve their majority stocks in India ventures for the Indian public under FERA, 1973. The 80's
saw a growth in the Indian Equity Market. With liberalized policies of the government, it became
lucrative for investors. The market saw an increase of stock exchanges, there was a surge in market
capitalization rate and the paid up capital of the listed companies. The 90s was the most crucial in the
stock market's history. Indians became aware of 'liberalization' and 'globalization'. In May 1992, the
Capital Issues (Control) Act, 1947 was abolished. SEBI which was the Indian Capital Market's
regulator was given the power and overlook new trading policies, entry of private sector mutual
funds and private sector banks, free prices, new stock exchanges, foreign institutional investors, and
market boom and bust. In 1990, there was a major capital market scam where bankers and brokers
were involved. With this, many investors left the market. Later there was a securities scam in 1991-
92 which revealed the inefficiencies and inadequacies of the Indian financial system and called for
reforms in the Indian Equity Market. Two new stock exchanges, NSE (National Stock Exchange of
India) established in 1994 and OTCEI (Over the Counter Exchange of India) established in 1992
gave BSE a nationwide competition. In 1995-96, an amendment was made to the Securities
Contracts (Regulation) Act, 1956 for introducing options trading. In April 1995, the National
Securities Clearing Corporation (NSCC) and in November 1996, the National Securities Depository
Limited (NSDL) were set up for demutualised trading, clearing and settlement.

Commodity Markets: A commodity market is a market that trades in primary economic sector rather
than manufactured products. Soft commodities are agricultural products such as wheat, coffee, cocoa
and sugar. Hard commodities are mined, such as gold and oil. Investors access about 50 major
commodity markets worldwide with purely financial transactions increasingly outnumbering
physical trades in which goods are delivered. Futures contracts are the oldest way of investing in
commodities. Futures are secured by physical assets. Commodity markets can include physical
trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers
have used a simple form of derivative trading in the commodity market for centuries for price risk
 management. Commodity trading in India has a long history. In fact, commodity trading in India
started much before it started in many other countries. However, years of foreign rule, droughts and
periods of scarcity and Government policies caused the commodity trading in India to diminish.
Commodity trading was, however, restarted in India recently. Today, apart from numerous regional
exchanges, India has six national commodity exchanges namely, Multi Commodity Exchange
(MCX), National Commodity and Derivatives Exchange (NCDEX), National Multi-Commodity
Exchange (NMCE) and Indian Commodity Exchange (ICEX), the ACE Derivatives exchange ( ACE
)and the Universal commodity exchange (UCX). The regulatory body is Forward Markets
Commission (FMC) which was set up in 1953. As of September 2015 FMC is merged with the
Securities and Exchange Board of India, SEBI.

Forex Markets: Forex (FX) is the market in which currencies are traded. The forex market is the
largest, most liquid market in the world, with average traded values that can be trillions of dollars per
day. It includes all of the currencies in the world. There is no central marketplace for currency
exchange; trade is conducted over the counter. The forex market is open 24 hours a day, five days a
week, except for holidays, and currencies are traded worldwide among the major financial centres of
London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney. The forex
is the largest market in the world in terms of the total cash value traded, and any person, firm or
country may participate in this market.

Foreign Exchange Reserves in India decreased to 361940 USD Million on July 8 from 363170
USD Million in the previous week. Foreign Exchange Reserves in India averaged 195421.84 USD
Million from 1998 until 2016, reaching an all-time high of 383643 USD Million in December of
2009 and a record low of 29048 USD Million in September of 1998. Foreign Exchange Reserves
in India is reported by the Reserve Bank of India.

Traditional investment avenues:

Real Estate: Real estate investing involves the purchase, ownership, management, rental and/or sale of
real estate for profit. Improvement of realty property as part of a real estate investment strategy is
generally considered to be a sub-specialty of real estate investing called real estate development. Real
estate is an asset form with limited liquidity relative to other investments, it is also capital intensive
(although capital may be gained through mortgage leverage) and is highly cash flow dependent. If
these factors are not well understood and managed by the investor, real estate becomes a risky
investment. The primary cause of investment failure for real estate is that the investor goes into
negative cash flow for a period of time that is not sustainable, often forcing them to resell the property
at a loss or go into insolvency. A similar practice known as flipping is another reason for failure as the
nature of the investment is often associated with short term profit with less effort.

Gold/Silver: Gold and silver are commodities which can be sold in bad times. In India, they are
considered good to keep. Everyone should invest some money in it. In bad times when all gates are
closed then gold and silver help you provide liquidity.
SOVEREIGN GOLD BOND:
 The Government of India will be launching the Sovereign Gold Bonds Scheme soon. As investors
will get returns that are linked to gold price, the scheme is expected to offer the same benefits as
physical gold. They can be used as collateral for loans and can be sold or traded on stock
exchanges.

BENEFITS:

The Sovereign Gold Bonds will be available both in demat and paper form.
The tenor of the bond is for a minimum of 8 years with option to exit in 5th, 6th and 7th years.
They will carry sovereign guarantee both on the capital invested and the interest.
Bonds can be used as collateral for loans.
Bonds would be allowed to be traded on exchanges to allow early exits for investors who may so
desire.
Further, bonds would be allowed to be traded on exchanges to allow early exits for investors who
may so desire.
Capital gain tax arising on redemption of SGB to an individual has been exempted. The indexation
benefit will be provided to LTCG arising to any person on transfer of bonds. The department of
revenue has said that they will consider indexation benefit if bond is transferred before maturity
and complete capital gains tax exemption at the time of redemption.

HOW TO BUY IT?

Sovereign Gold Bonds will be issued on payment of rupees and denominated in grams of gold.
Minimum investment in the bond shall be 1 grams. The bonds can be bought by Indian residents or
entities and is capped at 500 grams.

WHERE CAN I BUY IT?

Investors can apply for the bonds through scheduled commercial banks and designated post
offices. NBFCs, National Saving Certificate (NSC) agents and others, can act as agents. They
would be authorised to collect the application form and submit in banks and post offices.
BSE and NSE are included as receiving offices, apart from the commercial banks, SHCIL,
designated post offices

WHO IS ISSUING THE BONDS?

The Bonds are issued by the Reserve Bank of India on behalf of the Government of India. The bonds are
distributed through banks and designated post offices. This should make subscribing to the bonds an
easy affair. During redemption, "the price of gold may be taken from the reference rate, as decided, and
the Rupee equivalent amount may be converted at the RBI Reference rate on issue and redemption".

Chit Funds: A Chit fund is a kind of savings scheme practiced in India. A chit fund company is a
company that manages, conducts, or supervises such a chit fund, as defined in Section of the Chit
Funds Act, 1982. According to Section 2(b) of the Chit Fund Act, 1982"Chit means a transaction
whether called chit, chit fund, chitty, kuree or by any other name by or under which a person enters into
an agreement with a specified number of persons that every one of them shall subscribe a certain sum
of money (or a certain quantity of grain instead) by way of periodical instalments over a definite period
and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in
such other manner as may be specified in the chit agreement, be entitled to the prize amount".
 FINANCIAL REGULATORY BODIES

The financial system in India is regulated by independent regulators in the field of banking,
insurance, capital market, commodities market, and pension funds. However, Government of India
plays a significant role in controlling the financial system in India and influences the roles of such
regulators at least to some extent.

Statutory Bodies via parliamentary enactments:

Reserve Bank of India: Reserve Bank of India is the apex monetary Institution of India. It is
also called as the central bank of the country. The Reserve Bank of India was established on
April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The
Central Office of the Reserve Bank was initially established in Calcutta but was permanently
moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies
are formulated. Though originally privately owned, since nationalization in 1949, the
Reserve Bank is fully owned by the Government of India. It acts as the apex monetary
authority of the country. The Central Office is where the Governor sits and is where policies
are formulated. Though originally privately owned, since nationalization in 1949, the Reserve
Bank is fully owned by the Government of India. The preamble of the reserve bank of India
is as follows: "...to regulate the issue of Bank Notes and keeping of reserves with a view to
securing monetary stability in India and generally to operate the currency and credit system
of the country to its advantage."

Securities and Exchange Board of India: SEBI Act, 1992: Securities and Exchange Board
of India (SEBI) was first established in the year 1988 as a non-statutory body for regulating
the securities market. It became an autonomous body in 1992 and more powers were given
through an ordinance. Since then it regulates the market through its independent powers.

Insurance Regulatory and Development Authority: The Insurance Regulatory and

Development Authority (IRDA) is a national agency of the Government of India and is based
in Hyderabad (Andhra Pradesh). It was formed by an Act of Indian Parliament known as
IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements.
Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to
regulate, promote and ensure orderly growth of the insurance industry and for matters
connected therewith or incidental thereto.
Part of the Ministries of the Government of India:

Forward Market Commission India (FMC): Forward Markets Commission (FMC)

headquartered at Mumbai, is a regulatory authority which is overseen by the Ministry of
Consumer Affairs, Food and Public Distribution, Govt. of India. It is a statutory body set up
in 1953 under the Forward Contracts (Regulation) Act, 1952 This Commission allows
commodity trading in 22 exchanges in India, out of which three are national level.

PFRDA under the Finance Ministry: Pension Fund Regulatory and Development
Authority: PFRDA was established by Government of India on 23rd August, 2003. The
Government has, through an executive order dated 10th October 2003, mandated PFRDA to
act as a regulator for the pension sector. The mandate of PFRDA is development and
regulation of pension sector in India.
 DATA ANALYSIS & INTERPRETATIONS

Analysis of this report:

An analysis is made on the responses received from 110 sample investors. The
objective of the report is to find out the investors behaviour on various investments
avenues, to find out the need of the current and future investors.

The Questionnaire contains various questions on the investors financial experience,

based on these experiences an analysis is made to find out a pattern in their
investments.

Based on these investments experiences of the 110 sample investors, an analysis is

made and interpretations are drawn. Interpretations are made on a rational basis, these
interpretations may be correct or may not be correct but care is taken to draw a valid
and approvable interpretation.

Analysis is made only from the information collected through questionnaire no other
data or information is taken into consideration for the purpose of the analysis

The tools used for analysing are as follows

1. Percentage analysis

2. Ranking method

1. PERCENTAGE ANALYSIS:

Percentage method refers to a specified kind which is used in making comparison

between two or more series of data. Percentages are based on descriptive relationship.
It compares the relative items. Since the percentage reduces everything to a common
base and thereby allow meaning comparison.

Percentage = Number of respondents

----------------------- X 100
Total no of respondents
2. RANKING METHOD:

The ranking method was conducted to find out preference of investors regarding the
various investment alternatives and to find their prime objective for making
investment.
 TABLES & GRAPHS

PERSONAL DETAILS

1.
AGE
31 & above 22

26 to 30 23

21 to 25 65

0 10 20 30 40 50 60 70

Table No 1: Age of the samples

AGE GROUP COUNT PERCENTAGE

21 TO 25 YEARS 65 59
26 TO 30 YEARS 23 21
31 & ABOVE 22 20
YEARS
TOTAL 110 100

2.
GENDER
Male 75

Female 35

0 10 20 30 40 50 60 70 80

Table 1.1: Gender Details

GENDER COUNT PERCENTAGE

MALE 75 69
FEMALE 35 31
TOTAL 110 100
3.

QUALIFICATION
Under Graduate 4

Post Graduate 52

Graduate 54

0 10 20 30 40 50 60

Table 1.2: Educational Background

EDUCATION COUNT PERCENTAGE

GRADUATE 54 49
POST-GRADUATE 52 47
UNDER-GRADUATE 4 4
TOTAL 110 100

4.

OCCUPATION
Student 40
Salaried 51
Professional 9
Business 10

0 10 20 30 40 50 60

Table 1.3: Sectors Employed.

OCCUPATION COUNT PERCENTAGE

SALARIED 51 47
STUDENT 40 36
PROFESSIONAL 9 8
BUSINESS 10 9
TOTAL 110 100
5.

ANNUAL INCOME
8,00,001 & above 11

5,00,001 to 8,00,000 17

2,00,001 to 5,00,000 35

Below 2,00,000 46

0 5 10 15 20 25 30 35 40 45 50

Table1.4: Determining Investment Capacity

ANNUAL INCOME COUNT PERCENTAGE

BELOW 2 LAKHS 46 41
2,00,001 TO 5 LAKHS 35 31
5,00,001 TO 8 LAKHS 17 15
8, 00,001 & ABOVE. 11 13
TOTAL 110 100

INVESTMENT APPROACH

6.

WHAT DESCRIBES YOUR INVESTMENT

Expert 4 EXPERIENCE ?
Knowledgeable 13

Moderate 36

Beginner 56

0 10 20 30 40 50 60

Table 2: Investment awareness

EXPERIENCE COUNT PERCENTAGE

BEGINNER 56 51
MODERATE 37 33
KNOWLEGEABLE 13 11
EXPERT 4 5
TOTAL 110 100
7.

VARIOUS INVESTMENTS AVENUES

Real Estate 16
Insurance 43
Pension Funds 6
Equity Shares 15
Mutual Funds 18
Bonds 9
Bank Deposits 94
0 10 20 30 40 50 60 70 80 90 100

Table 2.1 :Investment Selection

INSTRUMENT COUNT PERCENTAGE RANK

BANK DEPOSITS 94 87.9 1
BONDS 9 8.4 6
MUTUAL FUNDS 18 16.8 3
EQUITY SHARES 15 14 5
PENSION FUNDS 6 5.6 7
INSURANCE 43 40.2 2
REAL ESTATE 16 15.1 4

8.

MA JOR FINANCIAL OBJECTIVES

Wealth Maximisation 73
Protect Incomes from Inflation 15
Reduction in Income Tax 33
Growth in Investment 43
Buy a House 53
Child Cost 21
Comfortable Retirement 58
0 10 20 30 40 50 60 70 80

Table 2.2: Reasons of Investment

FINANCIAL OBJECTIVE COUNT PERCENTAGE RANK

SECURE RETIREMENT 58 51.3 2
CHILD COST 21 18.6 6
BUY A HOUSE 53 46.9 3
INVESTMENT GROWTH 43 38.1 4
MINISATION OF TAX 33 29.2 5
 PROTECTION FROM INFLATION 15 13.3 7
WEALTH MAXIMISATION 73 64.6 1

9.

FACTORS CONSIDERED WHILE INVESTING

Maturity Period 33

High Returns 72

Low Risk 42

Safety of Principal 61

0 10 20 30 40 50 60 70 80

Table 2.3: Factors Determining Instrument selection

DETERMINANTS COUNT PERCENTAGE RANK

SAFE PRINCIPAL 61 54.5 2
LOW RISK 42 37.5 3
HIGH RETURNS 72 64.3 1
MATURITY PERIOD 33 29.5 4

10.

WHAT PERCENTAGE OF YOUR INCOME

DO YOU INVEST?
35% & above 3
26% to 35% 17
16% to 25% 36
1% to 15% 55
0 10 20 30 40 50 60

Table no 2.3: Investment Capacity

INVESTMENT % COUNT PERCENTAGE RANK

1% TO 15% 55 49.5 1
16% TO 25% 36 32.4 2
26% TO 35% 17 15.3 3
35% & Above. 3 2.7 4
11.
EXPECTED RETURN ON YEARLY BASIS ?
22% & above 8
15% to 21% 46
09% to 14% 47
04% to 8% 10

0 5 10 15 20 25 30 35 40 45 50

TABLE 2.4: Expected Return

EXPECTED RETURN (%) COUNT PERCENTAGE RANK

04 TO 08 10 9 3
09 TO 14 47 42.3 1
15 TO 21 46 41.4 2
22 & ABOVE 8 7.2 4

12.

HOW MANY YEARS IT TAKES TO GET A BANK

FD DOUBLE @ 9%
12 years 15

9 years 40

7 years 27

5 years 26

0 5 10 15 20 25 30 35 40 45

Table 2.5: Fixed deposits illusion

TENURE( YEARS) COUNT PERCENTAGE

5 26 23.6
7 27 24.5
9 40 36.3
12 15 13.6
13.

TIME HORIZON

Long Term (37 to 60 months) 28

Medium Term (13 to 36 months) 64

Short Term (1 to 12 months) 18

0 10 20 30 40 50 60 70

Table no 2.6: Time Horizon regarding investments

PERIOD( MONTHS) COUNT PERCENTAGE

SHORT TERM (1 TO 12) 18 16.3
MID TERM (13 TO 36) 66 60
LONG TERM (37 TO 60) 28 25.4

14.

HOW OFTEN YOU MONITOR YOUR

INVESTMENTS?
YEARLY 12
HALF YEARLY 16
QUARTERLY 31
MONTHLY 47

0 5 10 15 20 25 30 35 40 45 50

Table no 2.7: Monitoring of investments

FREQUENCY COUNT PERCENTAGE

MONTHLY 48 43.6
QUATERLY 32 29
HALF YEARLY 17 15.5
YEARLY 13 11.8
 INVESTMENT ORIENTED

15.

DO YOU INVEST IN SHARE MARKETS?

NO 90

YES 20

0 10 20 30 40 50 60 70 80 90 100

Table no 3: Prospective Clients

RESPONSE COUNT PERCENTAGE

YES 20 18.1
NO 90 81.8

16.

CAN U TAKE THE RISK OF LOSING

CAPITAL?
NO 88

YES 22

0 10 20 30 40 50 60 70 80 90 100

Table no 3.1: Risk Taking Appetite

RESPONSE COUNT PERCENTAGE

YES 22 20
NO 88 80
17.

WHAT ARE YOU MOST WORRIED OF?

Non Performing investments 25

Day to day Inflation 68

Income Uncertainity 36

Health issues 32

0 10 20 30 40 50 60 70 80

Table no 3.2: Botherations

FACTORS COUNT PERCENTAGE RANK

HEALTH ISSUES 32 29.4 3
INCOME UNCERTAINITY 36 33 2
INFLATION 68 62.4 1
NON PERFORMING INVESTMENTS 25 22.9 4

18.

MY INCOME -EXPENSES EXPERIENCE IN

RECENT PAST IS,
Expense within Incomes 38

Expenses equal to Income 28

Expenses exceeds Incomes 42

0 5 10 15 20 25 30 35 40 45

Table no 3.4: Budget planning

PAST TREND COUNT PERCENTAGE

EXPENSES EXCEEDS INCOME 42 38.1
EXPENSES EQUAL TO INCOME 29 26.3
EXPENSES WITHIN INCOME 39 35.4
19.

I AM AWARE OF
(AS APPLICABLE IN YOUR CASE)
Interest on bank Deposits is taxable 81

Divendend on Mutual fund units is tax free 25

Divedend on Equity is tax free 33

0 10 20 30 40 50 60 70 80 90

Table 3.5: Taxability awareness

AWARENESS COUNT PERCENTAGE RANK

INTERST ON BANKS DEPOSIT IS TAXABLE 81 73.6 1
DIVENDEND ON MFS IS TAX FREE 25 22.7 3
DIVEDEND ON EQUITY IS TAX FREE 33 30 2

20.

ARE YOU AWARE OF INFLATION EFFECT

ON YOUR INVESTMENTS?

NO 52

YES 58

49 50 51 52 53 54 55 56 57 58 59

Table 3.6: Inflation Effect

RESPONSES COUNT PERCENTAGE
YES 58 52.7
NO 52 47.2
 SOURCES OF INFORMATION INFULENCING
INVESTMENT DECISIONS
Family & Friends 71
Financial Consultants 39
Professionals (CA,RM,Brokers) 44
Internet 55
Financial Papers 37
Books 7
News Channel 47
News paper 54
0 10 20 30 40 50 60 70 80

TABLE 3.6: Sources Influencing investment decisions

SOURCES OF INFORMATION COUNT PERCENTAGE RANK

FAMILY & FRIENDS 71 64.5 1
FINANCIAL CONSULTANTS 39 35.4 6
PROFESSIONALS 44 40 5
INTERNET 56 50.9 2
RESEARCH PAPERS 37 33.6 7
BOOKS 7 6.3 8
NEWS-CHANNEL 47 42.7 4
NEWSPAPERS 54 49 3
 INTERPRETATIONS

The age group of the survey where we can see out of total 110 sample, 59% samples fall in the age
group of 21 to 25 years whereas age groups of 26 to 30 years and 31 years and above have 21% and 20%
respectively It can be also stated that no investor is of less than 21 years and so its a high time or
recommended time to start planning their investments wisely The average of the all the respondents is
very young, which is a very optimistic point in this survey as the early you start the more risk appetite
you have and you have the time horizon for waiting for long period

Out of total 110 respondents 69% of them are Male and Only 31% are females which help to derive the
message that in India even today Male are held and expected to be responsible about financial
investments

Around 96% of the total sample is educated in sense they have complete the graduation or post-
graduation only a mere 4 percent of investors are under graduate so it can be understood that the
respondent are capable of reading writing and doing critical analysis of various investment avenues.

47% of the total investors are earning through salary, 36% of other investors are student considering the
purchasing power of that class might be low when compared to others but starting early and in having
the advantage of being in the learning phase would be of a great benefit. Beside these two, 8% of the
investor are professional rendering their services and charging fees and 9% of the investors are
Businessmen performing business on medium to small scale and making money.

Capitalising the actual income received by the investors.41% of them have income below 2 lakhs ,31%
investors come in slab of 200001 to 5 lakhs ,15% investor have income levels of 500001 to 8 lakhs and
13% investors are earning above 8 lakh per year. As there is a huge number of students in this sample it
can be termed as major chunk of investor below 2 lakhs are coming belonging to it Most of the Salaried
investors are somewhere around 5lakhs but to my surprise the investors earning nearby or above 8 lakhs
are comprising of all 3 i:e Businessmen, salaried, professional
 Talking about the investments experience of the investors it can be concluded that most of them have not
made any investments till date either due to lack of knowledge or constraint of time. 51% of the
investors term themselves as beginners having no investment experiences and are only following
traditional ways of dumping the surplus cash in bank accounts,33% people opt to be a moderate in term
of investments being comfortable with large cap mutual funds, insurance and other government
securities.11% of the investors term themselves as knowledgeable about their investments having a
demat account and being aware of various investment avenues in the market preferably investing in
equity stocks. 5% of the investor are very much expert and take utmost care for handling their
investments and have thorough knowledge of derivatives and commodities.

When it comes about decide the investment instrument people want to select traditional bank deposits
tops the list with around 87.9% investors have one. These investors are very happy with the nominal
returns and fixed assured income after a tenure. The risk taking appetite is very poor either because of
family traditions lack of knowledge and fear of losing principal

The total sample of 110 respondents have 96% of investors below 30 years of age so the financial
objectives of them are very different when compared to a sample in his early 50s or late 40s when the
risk taking capacity get reduce due to age factor and people try to play safe. Wealth maximisation,
buying a house, Savings tax, Safe and Secure Retirement are the major financial objective of investor
planning to invest.

A large group of investors is having an income level below 2 lakhs rupees out of 110 and the Great
Indian tendency of getting a return make people to play safe and hence safety of principal coined as one
of the major factors in determining instruments. Investors have a wrong belief of earning high returns
without taking risk. Maturity period or locking phase is also one of prime factor in selecting investments.

Due to High Inflation rate in the country and unplanned expenditure investors in India are not able to
invest a good amount of their incomes. Around 50% of the people can invest up to 15% of their income
and on the other hand there are some 2.7% people who all are investing more den 35% of their Income.

Indian can be satisfied very easily 42.3% of the investors are happy with a return of 9 to 14% p.a. there
are also some greedy investors who need 22% and above which is very rational and possible but require
some sort of work from the investor end.15 to21% return is the most justified rate of return and about
41.4% of the investors opt for this as yearly return of investments. Its very much clear your return
expectations must be very realistic and logical. If an investors is keeping money in bank deposits he
should not expect anything above 8% p.a and if he needs he has to switch his loyalty to high performing
investments like equity, mutual funds and many more.
 Majority of Investors prefer to stay invested for mid-term (13 to 36 months) which opens many options
for them to invest anyone having a time horizon of around 3 years can invest in equities , mutual funds ,
gold bonds, government securities. Investors wanting to cash off their investments in short term are more
like to be effected from financial loses and fluctuations.

India being a developing country inflations has been a decades long problem which cannot be avoided
so its one of the major reason which makes investors worried about around 63% people chose inflation
as a cause of botheration. With High Expectancy life rate people, mechanical life cycle and unhealthy
lifestyle investor are bound to meet some health issue in future resulting it to be a major reason for
investor concern (30%)

Many of Indian Investors or house dont have a formal family budget in order to take care of their
expenditure as a reason of this 38.1% investors are not able to save any money and invest, 26.3% people
are somehow managing to meet their expenses, whereas there are around 35.4% people who have
managed their expenses due to strict budgets and investment schedules. Inflation has a very invisible
effect on investments so even in an investor sample of 110 respondents 47.2% of them are really
unaware of the effects of inflation on their respective investments.

Investors rely on first-hand information provided to them by someone who they trust or know earlier, its
very difficult for a sales person or company executive to sell off the investment instrument after a half an
hour talk so they consult or belief on family and friends (64.5%) for their investment selections. Print
and Electronic media also play a very important role as they serve a readymade suggestions and cover a
large amount of area. Investors also take professional help in deciding their financial decision as they are
very much aware about recent investments trends and can give good recommendation calls. Investors at
large are least interested in doing their personal research and put in their personal efforts. On the
Contrary there are nominal investor which depend on various research publications about their
investments

FINDINGS

The study reveals that male investors dominates the investment markets in India
Most of the investors have higher education like graduation and above
Most investors opt for two or more sources of information before makinf investment
decision
 Most of the investors discuss with their family and friends before making in investment
decisions
Percentage of the income investors invest depends on their annual income, more the
income more percentage they invest.
Womens are attracted towards investing in gold other than any other avenue
Increase in age decrease in risk tolerance level
Most of the investors get their information related to investments through electronic and
print media.
Most of the investors are financial illiterates.
Investor are very rigid in terms of getting the knowledge about the funds the
expectations of more returns in less time is a general human approach which is very
irrational and not at all realistic .With view to earn large amount return people come in
secondary markets juggle lot of money with-out any technical or fundamental research,
lose money in plenty and then blame the markets.
Investor are influenced by investments patterns followed within their family from
generations to generations like if someone has earned good amount in past through real
estate ignoring the present the scenario investors are bound to invest in the same avenue
The complications of markets are very difficult to understand for any common investors
as they lack the ability and tools to do their own research.
Bad Experience from new avenues make the investors to stop investing in new
instruments, and they slowly shift to rational avenues.
Expectations are very high in term of return and investors are not willing to take that
much risk, Which is clearly Violating the standard rule of Risk & Return Principal
I: e Higher the Risk Higher the Return.

SUGGESTION

INVESTORS:

Increase your monthly investments as much as you can:

Investing the bare minimum is a mistake most investors make. Even a small increase in your
monthly investments results in a huge difference in the amount you accumulate over the long term.
This is due to the compounding effect on money.
 Lets say there are two individuals A and B who earn Rs. 60,000 per month. They both invest in the
same set of mutual funds which give returns of 12% per annum over a same time period of 10 years.
The only difference is the amount of investment made every month. While A spends 70% of his
monthly income and invests Rs.18000 every month, B spends only 60% of his income and invests
Rs. 24000 per month. The total corpus, assuming constant monthly investments and constant returns
of 12% per annum over 10 years is Rs. 41.8 lakhs for A and Rs. 55.8 lakhs for B - a difference of Rs.
13.9 lakhs. A small difference of Rs. 6000 per month in investments has resulted in a huge difference
in the end-corpus.
Therefore, the first important aspect of investing in your 30s is to maximise your investments as
much as possible.

Build an emergency fund:

Life is uncertain and the best you can do to combat this uncertainty is to ensure you are financially
prepared for this. Emergencies can be a sudden job loss, a fall in income levels or a sudden medical
expense if you do not have health insurance. Start planning to build an emergency fund to deal with
such uncertainties while you are in your 30s. This fund should be earmarked for emergency purposes
only, and should not be touched for regular expenses. Remember that this fund should be easily
accessible, as you are preparing this for an emergency. While experts opine that you should set aside
at least 6 months of your expenses in an emergency fund, this can be even up to 2.5 years of your
expenses, depending on your risk-return tolerance. Liquid investments usually yield a lower return;
so plan your emergency fund accordingly.

Understand your financial goals and commitments in life:

You investments must be planned to help you realise your financial goals, without disturbing the
returns. For example, you cannot plan to purchase a car, 5 years from today using the amount in a 10
year fixed deposit which you started a year back. Each of your goals will have to be met at different
points of time in your life. So you must invest in various instruments according to these goals.
Lets say you estimate your childs post-graduate education in 15 years. You estimate todays cost to
be Rs. 10 lakhs for the same. Assuming an average inflation rate of 7% per annum, you will need
Rs.27.5 lakhs at the end of 15 years. So you will have to plan your investments so that you can meet
this financial goal. Similarly, you must also understand the quantum of your retirement savings.
Assume your monthly expenses are Rs. 50000, and you expect the pre and post retirement inflation
to be 7% per annum. You expect to earn 8% on your savings post-retirement. You will work for the
next 25 years and you expect to live for 20 years post retirement. You will need a total of Rs. 5.9
cores to sustain the present lifestyle. This amount looks humungous and unachievable. But it can be
achieved with proper planning and investing.

Get sufficient insurance cover:

A sudden death of the primary earning member can leave dependents devastated, both mentally and
financially. Ascertain the right amount of insurance needed, and ensure that you have taken enough
cover to protect your family in case of your sudden death. Remember, the earlier you take an
insurance cover on your life, the lower will be the premium to be paid. Also ensure you have other
insurance policies in place - like a health insurance, personal accident cover etc.
 Having a Mutual Fund:

Did you know that if you had invested Rs.1, 00,000 in HDFC Top 200 fund in 1996, your corpus is
worth nearly Rs 23, 00,000 now. That is staggering 2200% return over 20 years. You can easily
marry your daughter, put you kid through college with this fund. Mutual funds are ideal for an
individual investor who cant follow the market regularly. It allows a professional to take care of
your investments. You should invest with/for some long-term goals in mind. It provides you with
diversification.
Tip: Try to invest in a low-cost Index fund, if you want to keep your costs low. Yes, you can dabble
in active funds but the risk is also higher. In an index fund, the only risk is the risk of stock market.
The chance of all top 50 India companies failing at same time is highly unlikely.

Investing in Equity Markets:

If youre a seasoned investor or one who doesnt like mutual funds, then direct equity is best for you.
You make direct stock purchases of companies which you feel will do well in the future.SEBI
regulates the stock markets.
Equity Stocks have the best possibility to return the most returns if chosen wisely. All the billionaires
in the world are rich because they have either stocks or real estate as one of investment options.
You can only save money with conservative investment options. If youre serious about getting rich,
then majority of portfolio should be towards high quality stocks and real estate.
It has been proven world over that equity/shares in quality companies is the best investment option
for long-term returns. You dont need to restrict to Indian Equity. You can also buy shares in US and
other countries or invest in some international equity funds. Day trading is an addiction which can
ultimately prove disastrous. Encouragement should be given to invest in equity for the long term

Gold & Commodities:

Gold has formed the major portion of assets in Indian household. From analysing our clients and
studying wealth reports, we find Indian hold their assets primarily as real estate and gold i.e., average
Indians assets 80% is made of gold/realty. Gold has been considered as a hedge against inflation for
long time. Its good to have gold but make sure it doesnt form more than 10% of your overall assets.
Why? Because it has no utility (other than as jewellery which makes it primarily fashion accessory
than an investment option).You buy with a notion there will be someone else to buy at higher price
in future. Indians also dont buy other commodities much, so we better avoid them as its not for the
ordinary investor.
Tip: If you consider gold as an investment option, then the best way to invest in gold is Gold ETFs.
You store it in paper format. So there are no making charges, damages, theft issues or storage
hassles.

Having Realistic Goals:

Investors should have realistic Goals in terms of return they are going to earn. It is always better to
start with a good capital as more cash you have more options you open for yourself. A return of
between 15 to 21% per annum is very good so if you are earning something between this you should
be highly satisfied. People earning anything below 10% are actually not capitalizing their surplus
funds and should start something new at the earliest. Investors who all are earning more than 25%
are really doing a great job but are also prone to the high risk.
 Tax saving mutual funds ELSS plans( Equity Linked Saving Scheme)

Equity Linked Saving Schemes belong to mutual fund class. You also get the added benefit of tax
saving. Most Indians do not explore this investment option much. It is a plain simple product to get
exposure to equity as well save some tax under 80C. The Government of India specifically has ELSS
to encourage investments by common man into equity.
Contrary to popular perception ELSS funds have generated good returns in last 5 years. Well you
cant expect them to perform like Diversified Equity funds or thematic funds.
Why? Because they take comparatively lesser risk. It has only 3-year lock-in period which is shorter
compared to other 80C investments.
ELSS funds have an average 18% p.a returns in last 5 years. The DTC draft has a proposal to remove
ELSS from 80C bracket. So make hay while the Sun shines :-)
Tip: Invest in SIP or in staggered manner than a lump sum (unless market is extremely down). Youll
get the benefits of Rupee Cost averaging and long term compounding

ORAGANISATION

The Service charges rendered by the organisations is very competitive even tough company must try
to reduce it minimum Rs. 30 condition per contract note as it discourages an investor who wants to
invest 5000 per months in equity of his own and wants to consolidate his holding on any particular
script.

Monthly programs can be conducted with client by organising a formal get together which can help
to share thoughts, launch new products, tap new customers and many more such things building a
brand image.

Cost of Acquiring Clients is very high and its also have been seen that people start with great
enthusiasm and reduce or stop to trade or invest because of many reasons. In order to keep the spirits
high the company can start referral programs for the existing clients and giving them some amount of
prepaid brokerage balance or some subscriptions which does not affect the profits of the company.
As the Cost Spend on Getting a Client through an executive is high.

There are many co-operatives or small scheduled bank who have a good balance sheet and a huge
client base , company must try to tap these organisations as they have many clients who have to
depend on some other banks for their demat needs. We as broking House can provide them with all
such needs and we get a direct link or access to banks clients the revenue model of such ties ups can
be decided by mutual consents of both the parties.
 Training and inductions of Sales Executives is one of the most important part of getting the
businesses the executive represent the company in front of the client and if he is not proper trained or
capable of handling business it might turn into a loss of perspective client who could have rendered
the services but has brought into dilemma by the salesman.

In Span Of my two months internship at Angel I heard lot of things about PMS but when I tried to
search relevant data about the same like the claims of company about returns, it can be seen that
there are no documented charts, brochures or pamphlets describing the features of those HN1
product to make a pitch about the same to the client. Its Advisable to have a dedicated Prospectus
displaying the Benefits, future and present working scenario of the Portfolio Management Services.

Every Individual is unique and so does every investor is it is very subjective and may change from
person to person Company Should understand what type of Client or investor he is, conservative,
aggressive or somewhere in-between. Give proper Solutions to vest their investments instead of
offering him instruments which wont be proving of no use neither meeting the return expectations
or principal safety

We can encourage participation from household should own PSU shares so that company will also
get customer base and the margin will increase.

We must put up some financial literacy campaign as many people are still unaware of stock market
and in India there is youth which is untapped.

The communication should be increased and more personalized service should be given to investors
to earn trust and long run relationship.

The company must also provide more value added services to investors.

People give more importance to savings so as per their likings more opportunities should be
provided.
 CONCLUSION

This report is a reflection of the behaviour of various categories of investors. Selection of a perfect
investment avenue is a difficult task to any investors. An effort was made to identify the tastes and
preference of a sample of investors selected randomly out of a large population. Despite of many limitations
to the study I was Success full in identifying some investment patterns, there is some commonness in these
investors and many of them responded positively to the study.

This Report Concentrated in identifying the needs of current and future investors, investors preferences
towards various investment avenues are identified on their occupation. Investors risk in selecting a particular
avenue is dependent on the age of that investor.

This Study confirms the earlier findings with regards to the relationship between age and risk bearing
capacity of individual investors. The Present study has important implications for the investment managers
as it has come out with certain interesting facts of an individual investor. The Individual investor still prefers
to invest in financial products which give risk free returns. This Confirms that Indian investors even if they
are of high income, well educate. Salaried, independent are conservative investors prefer to play safe. The
Investment product designers can design product which can cater to the investors who prefer to take less
risk.

Indian markets are having a great potential to give large amount of returns to the investors its very
important on part of every stake holder be it the organisation, regulatory bodies, government or common
individual investors to infuse and create a sense of awareness among others about the benefits of the
instruments.

Only 2.5% of people in India Invest in Stock markets and Still we come in Top 10 exchanges, Entry of many
small individual investors will help to increase the volumes of shares in the market resulting in Index rise.
 REFERENCES

Books & Journals

Punithavathy Pandian, Security Analysis and Portfolio Management, Vikas Publishing House, New
Delhi, 2011

Brahmabhatt, P.S Raghu Kumari & Dr. Shamira Malekar, "A Study Of Investor Behavior On
Investment Avenues in Mumbai Fenil", TRANS Asian Journal of Marketing & Management
Research Vol.1 Issue 1, September 2012, ISSN (online)

N. Geetha & Dr. M. Ramesh,"A Study on People's Preferences in Investment Behaviour ", IJEMR
November 2011-Vol 1 Issue 6 - Online - ISSN 2249 2585 - Print - ISSN 2249 8672

Dr. Sarita Bahl, "Investment Behaviour Of Working Women Of Punjab", APJEM Arth Prabhand: A
Journal of Economics and Management, Vol.1 Issue 6, September 2012, ISSN 2278 - 0629

Meenakshi Chaturvedi & Shruti Khare , "Study Of Saving Pattern And Investment Preferences Of
Individual Household In India", International Journal of Research in Commerce & Management,
volume no. 3 (2012), issue no. 5 (MAY) ISSN 0976-2183

Central Statistical Organisation, India

Web-Sites
http://www.angelbroking.com/
http://www.investopedia.com/
istz.in/top-10-stock-broking-companies-in-india.html
http://www.indiapost.gov.in/financial_services.aspx
http://www.investopedia.com/terms/g/governmentsecurity.asp
http://www.franklintempletonindia.com/en_IN/investor/investor-education/fund-basics/how-mutual-
funds-work
https://www.fidelity.com/life-insurance-planning/what-is-life-insurance
http://www.allbankingsolutions.com/top-topics/dep1.shtml
http://finmin.nic.in/swarnabharat/sovereign-gold-bond.html
http://www.tradingeconomics.com/india/foreign-exchange-reserves
https://in.finance.yahoo.com/news/five-essentials-to-follow-when-you-invest-in-your-30s--
062305180.html